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The monopolistic integrated model and health care reform: the Swedish experience.

This article reviews recent reforms geared to creating internal markets in the Swedish health-care sector. The main purpose is to describe driving forces behind reforms, and to analyse the limitations of reforms oriented towards internal markets within a monopolistic integrated health-care model. The principal part of the article is devoted to a discussion of incentives within Swedish county councils, and of how these incentives have influenced reforms in the direction of more choices for consumers and a separation between purchasers and providers. It is argued that the current incentives, in combination with criticism against county council activities in the early 1990's, account for the present inconsistencies as regards reforms. Furthermore, the article maintains that a weak form of separation between purchasers and providers will lead to distorted incentives, restricting innovative behaviour and structural change. In conclusion, the process of reforming the Swedish monopolistic integrated health-care model in the direction of some form of internal market is said to rest on shaky ground.

Community Participation↗

Key challenges posed by the Clinton health care reform proposal.

President Clinton's proposal assumes that the bureaucratic, regulatory, informational, and financial demands it places on the health care system may be feasibly met. The authors refute these assumptions and argue that the proposal restricts individual freedom while it requires less individual responsibility. They also challenge the lack of incentives for cost-conscious purchasing of health care and for taking greater responsibility for individual well-being and societal health. The article recommends that behavior that drives up the cost of health care for individuals and society should be strongly discouraged through disincentives.

Evaluation Studies as Topic↗

Achieving incremental volume increases.

Despite provider assumptions that managed care contracts will yield incremental increases in patient volume, there are no guarantees that volume increases will be realized. Providers can improve the likelihood that incremental volume increases will be achieved, however, by including certain provisions in managed care contracts related to volume-based discounts, limitations on network size and composition, access to physicians, provider directory listings, patient financial incentives, service scope/carve-outs, and participation in all service products offered by the managed care organization. Negotiating such provisions may be difficult, but providers and managed care organizations that reach agreement on these provisions gain mutual understanding and frequently can form more successful relationships.

Community Networks↗

Health policy. Who's got the master card?

The last decade has seen huge shifts away from the command and control model which dominated health policy since the foundation of the NHS. The current Labour government Initially favoured a system based on collaboration and partnership working but the incentives to achieve this were not sufficiently strong. Competition is now once again openly cited as a driver for improved performance. Political demands mean that command and control are likely to remain key features of government health policy. But this, in turn, is likely to place major limitations on the local autonomy pledged by the government.

Cooperative Behavior↗

Functional outcomes of posthospital care for stroke and hip fracture patients under medicare.

BACKGROUND: Medicare's introduction of the Prospective Payment System for hospitals has led to tremendous growth in ways of providing posthospital care. Despite substantial differences in costs per episode of care, the type of posthospital care that produces the best results for specific types of patients is not clear. This study analyzed the outcomes of different types of posthospital care for a cohort of older Medicare patients (who had diagnoses associated with the use of a range of posthospital care modalities) for up to a year after hospital discharge. METHODS: Medicare patients hospitalized with strokes and hip fractures were enrolled consecutively just before discharge from 52 hospitals in three cities in 1988-1989. These diagnosis-related groups were chosen because patients were discharged to all three major types of Medicare-supported posthospital care. Patients were interviewed in-person before discharge and again at 6 weeks, 6 months, and 1 year after discharge. The functional outcomes of posthospital care were evaluated by the instrumental variables estimation approach to correct for selection bias caused by nonrandom treatment assignment. The impacts of discharge locations on the functional outcomes were examined by one-way analyses of variance (ANOVA). RESULTS: In general, the more disabled patients went to nursing homes and rehabilitation, but the overlap in distribution was sufficient to conduct the analyses. Stroke patients discharged to nursing homes had the highest mortality rate (P<.01). Stroke patients discharged to home health had the lowest rehospitalization rates (P<.05). Hip fracture discharged to home health care had the highest adjusted rehospitalization rate, whereas those discharged to nursing homes had the lowest adjusted rehospitalization rate (P<.05). For stroke patients, posthospital care in rehabilitation facilities or home health care was associated with significantly better functional improvement compared with stroke patients discharged elsewhere. However, functional outcomes deteriorated by 1 year posthospitalization among stroke patients who received their posthospital care at nursing homes or received no formal posthospital care. For hip fracture patients, all four types of posthospital care were associated with functional improvement, but patients discharged to rehabilitation facilities experienced the most functional improvement. CONCLUSIONS: The choice of posthospital care can influence the course of Medicare patients. Careful attention should be paid to how hospital discharge decisions are made and to the financial incentives for different types of posthospital care provided under the current payment system. The current supply of nursing homes is not well suited to the demands of posthospital care.

Activities of Daily Living↗

Evaluation of a Maryland fiscal incentive plan for placing state hospital patients in nursing homes.

In Maryland a six-month fiscal incentive to promote nursing homes' acceptance of chronic patients discharged from state psychiatric hospitals was evaluated after one year. During the fiscal year of the incentive program, such placements (N = 182) increased an average of 38 percent from previous years. Of 163 patients whose placements were evaluated, 22 were returned to the state hospital during the six-month period that the incentive was in place. Ten of the 22 were returned within 30 days of placement. Contrary to expectation, the return rate did not rise after the incentive was discontinued; four patients were returned during the second six months of the study period. Most returns during the first six months were due to patients' physical and verbal threats. The results supported the use of short-term fiscal incentives and emphasized the importance of intensive supportive interventions with chronic mentally ill patients early in the nursing home placement.

Aged↗

What is necessary to transform the quality of mental health care.

Improving the quality of care is a national priority in the United States; however, it is not clear how to accelerate progress for mental health care. We recommend advances in three capacities: (1) developing quality improvement resources applicable to a diverse set of mental health disorders, clients, and service settings; (2) improving the infrastructure for providing evidence-based psychotherapy and psychosocial interventions; and (3) promoting innovation in financial incentives for quality improvement in mental health care. We also discuss the need to develop leadership among health care stakeholders and community engagement to promote public commitment to high-quality care in mental health.

Evidence-Based Medicine↗

Incentives and clinical governance: money following quality?

This paper attempts to define quality (particularly in terms of evidence-based health care) and considers the incentives available to bring about improvements in quality. It examines the contribution that economics, as a discipline, can make to the debate on clinical governance. It considers the nature and importance of clinical governance, measuring quality, objectives and behaviour in questions raised concerning objectives and individual and team behaviour.

Evidence-Based Medicine↗

Risk adjustment: where are we now?

Risk adjustment is intended to minimize selection of patients or enrollees in health plans. Current efforts generally are recognized as inadequate, but improvement is difficult. The greatest short-term gain will come from introducing diagnostic information, though outpatient diagnosis data are unreliable. Initial efforts may use inpatient data, but this creates incentives to hospitalize people. Even exploiting diagnosis information leaves substantial imperfections. Partial capitation, common in behavioral health, reduces incentives to select patients and stent on services, but current policy resists it, perhaps because policymakers misinterpret the lesson of the Prospective Payment System. Theoretically, not paying plans more for providing additional services is optimal only if consumers are well informed.

Capitation Fee↗

Generous provider incentives deliver dramatic returns.

A stunning success in the use of provider incentives to boost care. A physician incentive program established a decade ago by CA-based Inland Empire Health Plan has turned into a powerhouse for quality improvement. In fact, the approach has worked so well that the plan has now turned its attention to chronic care management, where early evidence suggests that generous bonus payments will produce improvements in clinical outcomes as well as process measures.

Adolescent↗

Quality or financing: what drives design of the health care system?

The scope and scale of problems in the quality of health service provision have been increasingly recognised in recent years. Policy and planning for financing are usually concerned with how funding is made available and allocated, rather than with what is being achieved, including the quality of health services delivered. A fundamental challenge is how to improve the delivery of health services to achieve improved patient outcomes and to optimize financial outcomes. To accomplish this it is essential that the debates on quality of care and financing are aligned. Approaches to improving the quality of care are drawn from Australia, the US, and the UK. Financing arrangements for care at a national level have a bearing on how payment incentives can be used to promote or impede quality. The level of overall expenditure is obviously important, as are the mechanisms for payment. Long term programs to build knowledge, standardise processes, provide credible performance data and foster accountability are required to ensure that further investments lead to improvement in care.

Australia↗

The evolution of hospitalist programs.

In just a few years, hospitalist programs have evolved to a third generation, affording key participants an opportunity to reduce inpatient healthcare costs. Because the method of inpatient payment determines the economic winners and losers in the program, the key participants will benefit from the implementation of a program that includes shared incentives. Even though reduced payments for inpatient services might be offset by reduced variable costs for hospitals and increased office revenues for primary care physicians, a hospitalist program is more likely to achieve sustained success if it is structured so that financial rewards are distributed fairly among the participants.

Contract Services↗

Financial incentives and productive efficiency in Finnish health centres.

This paper examines the productive efficiency of Finnish health centres by applying data envelopment analysis (DEA) and econometric methods. The Tobit model was used in an attempt to find out how various economic, structural and demographic factors affect efficiency. The dependent variable of the model, the coefficient of inefficiency, was obtained by deducting the DEA efficiency score from one. According to the results, a high percentage of funding coming from central government matching grants and high taxable income per inhabitant are significant predictors of inefficiency. The results suggest that more generous resources tend to increase inefficiency since they may lessen incentives for tight cost and performance control. A high share of doctors and a low share of administrative, maintenance and support personnel promote efficiency. A low population share of the elderly and a long distance to the nearest hospital are positively associated with inefficiency.

Community Health Centers↗

The management of health services in Tanzania: a plea for health sector reform.

There are essentially four main approaches used in attempts to strengthen the management of health services in developing countries. These are: information system development; management training; use of planning and evaluation methodologies; and, health sector reform. As part of a collaborative research project based in Kisarawe District, Tanzania, we tested the hypothesis that a combination of the first three of these approaches would be sufficient to ensure that decisions and actions were taken to bring about major improvements in the management of health services. It was assumed that the decentralization, which took place as part of the 1982 reorganization of local government responsibilities, had provided managers with sufficient decision-making autonomy to allow them to bring about improvement in health service performance, provided that the other conditions were met. In fact, it was found that despite being presented with clear evidence of serious inefficiencies and inequities in the allocation of health resources, managers were often highly reluctant to decide upon actions which would alleviate the problems in situations where there were potential losers as well as winners, even if the benefits greatly outweighed the costs. This article argues that interventions based solely on training, information systems, or planning and evaluation protocols will make only marginal improvements to health service management, and that changes to the system as a whole are needed in order to provide managers and health professionals with incentives to rectify performance failings. Some ideas for health sector reform, to give managers power and incentives for improving efficiency and quality of care, are put forward. Since it is likely that the systemic problems of the health sector in Tanzania are shared by many other developing countries, the lessons drawn from this study probably have more general applicability.

Administrative Personnel↗

Impact of economic incentives on quality of professional life and on end-user satisfaction in primary care.

BACKGROUND: A new economic incentive scheme based on (i) quality of care objectives for physicians, and (ii) professional development for both physicians and nurses, was introduced in primary care teams. OBJECTIVE: To assess weather the implementation of these economic incentive schemes has had an impact on the quality of professional life (QPL) of both physicians and nurses and on end-user satisfaction. METHODS: Before-after study. Participants are 257 primary care teams in Catalonia, Spain, in the period 2002-2003. QPL and end-user satisfaction were used as outcome measures. RESULTS: QPL was improved in terms of the dimension "perception of support from the management structure" among physicians (4.897 versus 5.220; p<0.001) as well as nurses (5.272 versus 5.638; p<0.001). Further, physicians perceived an increase in the dimension "demands made upon them" (6.124 versus 6.364; p<0.001), differently from the nurses group (5.8191 versus 5.929; p=0.063). Overall, user satisfaction did not vary significantly, although a positive relationship was found between "perception of support from the management structure" and user satisfaction among nurses (beta=0.078, p=0.007), and a negative relationship between "demands made upon them" and user satisfaction in the case of physicians (beta=-0.057, p=0.011). CONCLUSIONS: Incentives related to quality of care annual targets may increase physicians' perception of burden and it may have a negative impact on consumer satisfaction. Incentives on long-term professional development seem to be related to an increase in professionals' perception of support from the management structure. Among nurses, this increase is related to an improvement of user satisfaction.

Female↗

Family doctors and innovation in general practice.

Family doctors have been presented with changes in government policies and incentives in a recent white paper on primary care. Little work has been done, however, to find out how general practitioners respond to such measures. The response of general practitioners to professional and economic incentives was examined in relation to the location of the practice and the characteristics of the practitioners in seven different areas of England. The areas represented urban, rural, affluent, and deprived communities. The overall response rate was 74%, but the response varied among the areas, being poorest (64%) in an inner city area. Practices were subdivided as innovative, traditional, or intermediate, according to whether they employed a nurse and participated in the cost rent scheme and the vocational training scheme. Innovative practices were defined as fulfilling two of these criteria and traditional practices as fulfilling none; the remainder were classed as intermediate. The results showed that these three types of practice had distinct strategies that were related to financial constraints and the local population. Innovative practices had more partners and were often located in rural or affluent suburban areas; traditional practices had fewer partners and were more common in urban and working class areas. Innovative practices seemed to be in the best position to increase their services, and hence their incomes, in response to the recent proposals in the white paper. Practices in areas of developmental difficulty (predominantly urban but not necessarily inner city areas) had been less able to respond to existing incentives and had a smaller margin available for developing their services. In view of the effect of local constraints of economics and population on the strategy of practices, concentrating resources for primary care in local budgets for working class and urban areas may be preferable to extending the system of charging fees for services provided by family doctors.

Family Practice↗

Medicare and Medicaid physician payment incentives.

The incentives in the Medicare and Medicaid physician payment systems and their effects on six interrelated aspects of health care costs and beneficiary access to care were analyzed. Research results and data presented indicate that Medicare and Medicaid physician payment incentives are inconsistent with current public policy goals of (1) containing inflation in fees and expenditures, (2) encouraging physician participation in public programs, (3) improving the geographic and specialty distributions of physicians, (4) encouraging primary care instead of surgery, and also outpatient rather than inpatient treatment.

Ambulatory Care↗

The payers' automation challenge.

Despite some success stories, most of the nation's 300 commercial insurers and hundreds of managed care plans are in the earliest stages of using electronic data interchange for health care transactions. However, there are some encouraging signs of progress in the effort to shift to EDI, as more payers offer providers incentives to automate. Payers blame the relatively slow progress on cost, the absence of universally accepted standard electronic formats and uncertainties over the political debate on health reform. But providers say many commercial payers are moving too slowly to automate and are expecting providers to bear too much of the financial burden.

Blue Cross Blue Shield Insurance Plans↗